When to take Social Security

[Harpy Eagle]

That is the great unknown about retirement planning...nobody knows how long they're gonna live.

This is a fact. My sister and BIL had made great plans and had it all set up, and at 63 he developed weird heart disease and was dead in 7 months.

 

[Harpy Eagle]

Nobody reads. You don't have to wait to 72 to keep working w/o penalty.

Geez. I'll delete all my posts above. You're welcome GG. Nary a thankyou?

Figure out your own situation if you're smart enough. But you did have to ask....

Did I hurt your little snowflake feelings?

I am terribly sorry.

 

[iamwhatiseem]

Unfortunately in America one of the biggest deciders, surprised not mentioned here - is healthcare insurance cost. You are not eligible for Medicare till you are basically 65.
That is a significant cost to factor in

 

[Thunk]

This is a fact. My sister and BIL had made great plans and had it all set up, and at 63 he developed weird heart disease and was dead in 7 months.

All I can say is I would rather croak before my money runs out rather than be old and broke!

My sis used to ask me...what if I don't live that long?

I would answer...what if you do?

 

[Winco]

He said he would get $1,000 a month starting at age 65...or $1,400 per month starting at age 70.

That is very weak.

If I collected in October, when I tun 62, I Would get $2300 per month.
If I wait, it get more.

I currently have a paying job above the SS limit.\\
I will continue to collect that job, and WAIT of SS.

 

[Thunk]

That is very weak.

If I collected in October, when I tun 62, I Would get $2300 per month.

Read the very first sentence I wrote in this thread.

 

[Harpy Eagle]

All I can say is I would rather croak before my money runs out rather than be old and broke!

My sis used to ask me...what if I don't live that long?

I would answer...what if you do?

It is a balancing act that is for sure

 

[Thunk]

It is a balancing act that is for sure

Yup. Then you need something outside of the US dollar just in case (land, gold, collectables...SOMETHING).

 

[Winco]

I'll fudge the number just to make the math easy. I just did this for my brother.

He said he would get $1,000 a month starting at age 65...or $1,400 per month starting at age 70.

He would be missing out on $60,000 in payments if he waited until 70...and gains an additional $400 per month if he waits.

60,000 divided by 400 = so many months...multiply by 12 to turn it into years. And poof...he will hit the "break even point" at age 84 and a half. (where he finally makes up that 60,000 in lost payments).

Then I asked him "do you thunk you'll live to 84 and a half"?

He said probably not.

I said than take it at age 65.

Another thing I didn't factor in is INFLATION...which also favors taking it as early as possible.

OK...now look at your family history. Do most people make it past 77 or croak before hand?

 

[Winston]

All I can say is I would rather croak before my money runs out rather than be old and broke!

My sis used to ask me...what if I don't live that long?

I would answer...what if you do?

I think that is everyone's plan. Almost every single retiree I have worked with believes they are going to die soon.

Yes, you can retire early and take about 75% of your "full-benefit". But what many people miss is that you can keep working past your full retirement age, adding about eight percent per year to your benefit amount, and that is not including adding value if those years are among your best 35.

Typically, it is 14 years. It takes 14 years until you start losing money for taking Social Security early. At 62 that puts it at 76. At 65 that puts it at 79. I am here to tell you, those three years of drawing that check before you are 65 are going to hurt when you are 80. Not like you can pick up a side gig to make some extra money. Well, some can.

So, the real question is, how long are you going to live. If you are 65 and don't have any chronic health condition you are probably going to make it to 80. But the biggest determinant of your life expectancy is the age of your mother at your birth. If under 25, don't take Social Security early.

 

[Thunk]

If you are 65 and don't have any chronic health condition you are probably going to make it to 80.

Until that big ass bus runs over you

 

[HereWeGoAgain]

This seemed the best forum for this topic.

I really do not want to argue about if it will still be around or not ,just looking at the best time to take it.

I have to wait till I am 67 to get the "full" benefits.

But doing the math if I start taking it at 65 it is not till I am 77 that I would have made more money over all than if I took it at 65.

And even by the time I hit 80 , I would have only made just under 20 grand less total by waiting till 67.

But then there are work restrictions so one pretty much has to be done working in order to take them.

So many decisions.

To me it depends on your savings.
If you have enough in savings you take it as soon as you can.
I know I'm going to take it when I'm allowed to do so.
People are now living shorter lives so I figure it's best to get it while you can.

 

[JustAnotherNut]

But will I enjoy the money more when I am in my early 70s than in my 80s, plus our 401ks will keep us funded till I am 91 if we are not wasteful, and I have my Marine Corps retirement

Work until your wife is at retirement age. With both SS and 401ks and MC retirement......plus proceeds from whatever you sell when you move to a lower cost country.....should keep you both decently funded, not rich but not broke either.

Another possible form of income, would be to rent out your home here for a bit more than the payments (if you still have a mortgage) instead of selling it. If your mortgage is paid off, then it's all yours except taxes and insurance.



Either way and whatever you decide.........make sure you apply for SS 6 months before you plan to retire. There is a mandatory 5 month wait to receive benefits and since SS pays the month AFTER, your first check comes on the 6th month.

Also, payments now are staggered through the month and are determined by your birthdate, so your checks wouldn't come until later in the month, not necessarily on the 3rd day as in the past, unless your birthdate is within the first week of the month.

And another thing...........if something happens to you, your wife will NOT be able to draw your SS benefits unless she made less than 72% (?) than you did and visa versa.

Also apply for medicare beforehand as well.........IOW, don't wait until you retire to start applying for either benefit

 

[JustAnotherNut]

Oh and BTW............that 5 (6) month waiting period on SS benefits........you do NOT get the money for those months at any time

 

[EvilCat Breath]

If you take SS at 65, you are told that if you wait until 70, your benefits will be more. The truth is if you take it at 65, your payments will have a yearly increase. Your payments at 70 will be exactly the same as if you waited until 70. I have been retired or semi retired for ten years. I collect $500.00 more a month today than when I started.

 

[Harpy Eagle]

Work until your wife is at retirement age. With both SS and 401ks and MC retirement......plus proceeds from whatever you sell when you move to a lower cost country.....should keep you both decently funded, not rich but not broke either.

Another possible form of income, would be to rent out your home here for a bit more than the payments (if you still have a mortgage) instead of selling it. If your mortgage is paid off, then it's all yours except taxes and insurance.



Either way and whatever you decide.........make sure you apply for SS 6 months before you plan to retire. There is a mandatory 5 month wait to receive benefits and since SS pays the month AFTER, your first check comes on the 6th month.

Also, payments now are staggered through the month and are determined by your birthdate, so your checks wouldn't come until later in the month, not necessarily on the 3rd day as in the past, unless your birthdate is within the first week of the month.

And another thing...........if something happens to you, your wife will NOT be able to draw your SS benefits unless she made less than 72% (?) than you did and visa versa.

Also apply for medicare beforehand as well.........IOW, don't wait until you retire to start applying for either benefit

Thanks, good information to know.

 

[WorldWatcher]

Work until your wife is at retirement age. With both SS and 401ks and MC retirement......plus proceeds from whatever you sell when you move to a lower cost country.....should keep you both decently funded, not rich but not broke either.

Another possible form of income, would be to rent out your home here for a bit more than the payments (if you still have a mortgage) instead of selling it. If your mortgage is paid off, then it's all yours except taxes and insurance.



Either way and whatever you decide.........make sure you apply for SS 6 months before you plan to retire. There is a mandatory 5 month wait to receive benefits and since SS pays the month AFTER, your first check comes on the 6th month.

Also, payments now are staggered through the month and are determined by your birthdate, so your checks wouldn't come until later in the month, not necessarily on the 3rd day as in the past, unless your birthdate is within the first week of the month.

And another thing...........if something happens to you, your wife will NOT be able to draw your SS benefits unless she made less than 72% (?) than you did and visa versa.

Also apply for medicare beforehand as well.........IOW, don't wait until you retire to start applying for either benefit

Survivor benefits

Find out what Social Security Survivor benefits are, who can get them, and how to apply.

www.ssa.gov

In general I agree, but could you link to the requirement that a spouse make 72% less than the primary insured? This is the first time I've heard of that. Maybe its something specific to early retirement?

My wife and I are eyeing retirement in a couple of years and have been reviewing our retirement planning (things are looking good). Barring a catestrophic accident or illness we will both have reached SS FRA (Full Retirement Age) Each tab in the spreadsheet is a different scenario and the one for me passing (higher salary) before my wife (57% of mine) is that she will - upon my passing - get a bump to SS based on my higher rate.

The way I read the information from SS is that if the primary insured passes and the surviving spouse is younger than FRA, then the benefit is reduced because of the younger age. But if the surviving spouse is over FRA then they can receive your benefit amount.

WW

(Note: Just for clarification for folks that may not know. Full benefit amount does not mean a surviving spouse draws their SS and the SS benefit of the deceased spouse. No. They get an adjustment up to an equal amount. So is "A" draws $2500 a month and "B" draws $2000 a month and "A" passes. Then the amount for "B" can be adjusted up to "A's" rate which was $2500 a month. If the surviving spouse already has the higher benefit there is no adjustment of course.)

 

[WorldWatcher]

GG,

There is no one correct answer. What it takes is sitting down and looking at a lot of variables in terms of transitioning to retirement and trying to come up with different scenarios factoring in those variables with each major shift (full retirement age, early retirement, one retires early one doesn't, one surviving spouse, etc.) and measuring them against current status. Some of those variables are:

• Defined Benefit Income (pensions, SS, etc.)
• Defined Contribution Assets (401K, IRA's, investments, etc.)\
• Medical benefits (Current, post employment employer plan (?), Medicare, etc.)
• Housing costs (is there a mortgage, rental, home ownership).
• How much will there be in retirement income compared to current employment income as a function of the standard of living you are aiming for? Some planner's say 80-90% of current income at retirement but even that is a guess.

In our case my wife and I are the same age so that is not a factor. I'm the higher wage earner but her employer provides better benefits (medical). I currently have a spreadsheet with 18 different tabs for different scenarios. In our baseline scenario, the bulk of are retirement income will come from our Defined Benefit income. That alone replaces 93.7% of our current income, but, and this is a big but, we will be paying off the home mortgage right around the time of retirement. So even though Defined Benefit retirement income will go down to 93.7% of current income, disposable income will go UP because of the elimination of the monthly mortgage.

The Defined Contribution Assets are our "shock absorber". The baseline retirement budget allows us to maintain our standard of living and even do a little travel based solely on Defined Benefits income, the Defined Contribution Assets will not need to be touched in the near term. That means those assets will continue to grow and our projections use a modest 3-4% growth rate. If we were to leave the principal alone and only take interest each year it would raise total retirement income to 109.3% (at 3% return) to 112.6% (at 4% return) of current employment income. (Ya, that's a nice place to be.)

But important scenarios to include are what will be the financial plan for the surviving spouse in the event the other passes in terms of the previously mentioned variables.

This year I added to the normal scenario tabs ones for "What happens if SS goes away in 2035?" and "What happens if SS is reduced by 25% in 2035". Because we have other revenue streams, a 25% reduction in SS causes a 10% reduction in total Defined Benefit Income, not enjoyable but survivable. A total elimination of SS (unlikely) would be a lot harder and would require dipping into Define Contribution Assets well ahead of schedule. But only time will tell.

We split out thinking between Defined Benefits Income and Defined Contribution Assets for one important reason. Defined Benefits stuff goes away when we pass. However Defined Contribution Assets are ours and can be passed down to beneficiaries upon our passing (if we don't spend it all - LOLz).

WW

 

[Moonglow]

Depends on when you plan on dying.

 

[Harpy Eagle]

GG,

There is no one correct answer. What it takes is sitting down and looking at a lot of variables in terms of transitioning to retirement and trying to come up with different scenarios factoring in those variables with each major shift (full retirement age, early retirement, one retires early one doesn't, one surviving spouse, etc.) and measuring them against current status. Some of those variables are:

• Defined Benefit Income (pensions, SS, etc.)
• Defined Contribution Assets (401K, IRA's, investments, etc.)\
• Medical benefits (Current, post employment employer plan (?), Medicare, etc.)
• Housing costs (is there a mortgage, rental, home ownership).
• How much will there be in retirement income compared to current employment income as a function of the standard of living you are aiming for? Some planner's say 80-90% of current income at retirement but even that is a guess.

In our case my wife and I are the same age so that is not a factor. I'm the higher wage earner but her employer provides better benefits (medical). I currently have a spreadsheet with 18 different tabs for different scenarios. In our baseline scenario, the bulk of are retirement income will come from our Defined Benefit income. That alone replaces 93.7% of our current income, but, and this is a big but, we will be paying off the home mortgage right around the time of retirement. So even though Defined Benefit retirement income will go down to 93.7% of current income, disposable income will go UP because of the elimination of the monthly mortgage.

The Defined Contribution Assets are our "shock absorber". The baseline retirement budget allows us to maintain our standard of living and even do a little travel based solely on Defined Benefits income, the Defined Contribution Assets will not need to be touched in the near term. That means those assets will continue to grow and our projections use a modest 3-4% growth rate. If we were to leave the principal alone and only take interest each year it would raise total retirement income to 109.3% (at 3% return) to 112.6% (at 4% return) of current employment income. (Ya, that's a nice place to be.)

But important scenarios to include are what will be the financial plan for the surviving spouse in the event the other passes in terms of the previously mentioned variables.

This year I added to the normal scenario tabs ones for "What happens if SS goes away in 2035?" and "What happens if SS is reduced by 25% in 2035". Because we have other revenue streams, a 25% reduction in SS causes a 10% reduction in total Defined Benefit Income, not enjoyable but survivable. A total elimination of SS (unlikely) would be a lot harder and would require dipping into Define Contribution Assets well ahead of schedule. But only time will tell.

We split out thinking between Defined Benefits Income and Defined Contribution Assets for one important reason. Defined Benefits stuff goes away when we pass. However Defined Contribution Assets are ours and can be passed down to beneficiaries upon our passing (if we don't spend it all - LOLz).

WW

Thanks for the thoughts.

I too have been working on a spreadsheet for this. My wife laughs at me for my over use of them!

I think in the end the two deciding factors will be when she feels she can no longer physically keep nursing and when our 401ks feel full enough.

I am a retired Marine so my medical is good, that is one worry I do not have that many do. I pay less a year for TriCare than some pay a month for their insurance.

We plan to retire outside of CONUS which will lower our daily cost of living and open up cheaper travel opportunities.